Thursday, February 23, 2012

Gas prices are spiking. That's great news, right? We have to wean ourselves off the stuff. At least that's what we've been hearing for years. Oil is dirty. We import it from nations that hate our guts (like Canada!). And moreover, we're running out. Oil is "finite." Finite much in the way water is finite.

So why aren't Democrats making the case that the spike in prices is a good thing? Isn't this basically our energy policy these days? How we "win the future"? If high energy prices were to damage President Barack Obama's re-election prospects, it would be ironic, considering the left has been telling us to set aside our "dependency"—or, as our most recent Republican president put it, "addiction"—for a long time.

If Democrats had their way, after all, we would be enjoying the economic results of cap-and-trade policy these days—a program designed to increase the cost of energy by creating false demand in a fabricated market. As the theory goes, if you inflate the price of fossil fuels, the barbarians might finally start putting thought into how peat moss might be able to power a toaster.

In 2008, Steven Chu, Obama's (and, sadly, our own) future secretary of energy (sic) lamented, "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe." The president, when asked whether he thought $4-a-gallon gas prices were good for the American economy, said, "I think that I would have preferred a gradual adjustment."
How gradual? Like, what, four years? Or is it eight?

Part of "figuring it out" surely had something to do with the recent decision by Obama to nix the Canadian Keystone XL pipeline project that would have pumped 700,000 barrels of oil per day into the United States. More oil just means more excessive, immoral, ugly energy use.

Well, get used to it. You can't take three steps without stepping over some potential 10-billion barrel reserve of dead organisms.
According to the Institute for Energy Research, there is enough natural gas in the U.S. to meet electricity demand for 575 years at current fuel demand, enough to fuel homes heated by natural gas for 857 years and more gas in the U.S. than there is in Russia, Iran, Qatar, Saudi Arabia and some place called Turkmenistan combined. Oil? The U.S. Energy Information Administration estimates that the United States could soon overtake Saudi Arabia and Russia to become the world's top oil producer. There are tens of billions of easily accessible barrels of offshore oil here at home—and much more oil around the world.
Yes, gas prices have spiked an average of 14 cents a gallon in the past month and about 30 cents a gallon since last November, according to AAA. Oil prices jumped to a nine-month high—more than $105 a barrel—after the Iranians shut down their own energy exports to Britain and France so they could start a much-needed nuclear program, which is, no doubt, for wholly peaceful purposes.
Given the fungibility of commodities and the track record of civilization in the Middle East, we'll likely always have to deal with occasionally painful fluctuations in the price of energy, regardless of what we do at home—drilling and new pipelines included. Still, fluctuations have a lot better track record than price controls.
Subsidizing quixotic green companies or creating carbon credits won't stop the rules of basic economics. If the gas crunch starts hitting the economy, it's doubtless that we will get an earful of populist hand-wringing and that we'll hear the administration once again blame wealthy speculators and nasty oil companies.
Yet in the end, high gas prices are part of the plan. This is what the administration wants.

Wednesday, February 22, 2012

"We're on the threshold of disaster. We need to increase food production by 50 to 70 percent on less land with less resources, less water and, frankly, not enough technology."-Dr. Nancy Irlbec, Associate Dean of academic affairs for Colorado State University's College of Agricultural Sciences, describing global food production and the demographics of the 21st Century.

Once again, another shocking story that threatens the personal privacy of US citizens has been kept from us by our politicians and the mainstream media.

Did you know that a bill, HR 658, the FAA Air Transportation Modernization and Safety Improvement Act, has just passed both the House and the Senate that authorizes the use of 30,000 spy drones over America? Like the anti-Posse Comitatus NDAA legislation that passed in November, this bill was not widely reported by the mainstream media.

Do not feel bad for not knowing about this, because, similar to the anti-Constitutional NDAA legislation, they purposefully tried to hide this from the American public. The corporate controlled mainstream media was once again complicit and was an integral accessory in this crime against “We the People.” The corporate mainstream media failed us all miserably once again.

Think about the enormity of this for a second… 30-THOUSAND drones flying overhead surveilling the US. If you divide that by 50 states, that is 600 drones per state! Most states don’t have even have one-third of that in counties, so 600 drones, or more per state is a bit overwhelming. And considering that some states are very small, such as Rhode Island and Connecticut, it won’t take that many to spy on those diminutive territories, leaving far more drones to cover the larger states.

This is an outrage, plain and simple. If you’re not pissed off about this, you’ve got shit for brains. There is no good reason why we should have 24/7 surveillance of American citizens. Of course the advocates for creating this intensified police state will proffer that this is needed “to fight terrorism,” but let’s examine that issue for just a moment.
We’ve only had two successful acts of terrorism in the US, both happening well over ten years ago. It’s not like we’re under a constant monthly or weekly barrage of terrorism, at least not from foreign threats. We’ve been terrorized by our politicians and our media plenty, far more than we have from foreign entities. That’s an undeniable fact. Again, just look at the record.
We had the 9/11 attacks in 2001, and then shortly after we had the anthrax attacks. As we look at both of those events, there is an incredible amount of evidence that points to a false flag operation, state sponsored terrorism by rogue factions within our own government, blamed on a foreign entity. See the NewsFocus reports on the 9/11 attacks and the anthrax attacks.
These plots succeeded solely because of US officials and their dereliction of duty, yet our Constitution and “We the People’ are the ones who have been made to suffer. The highly flawed 9/11 Commission admitted as much.
Senator Mark Dayton excoriated the Commission panel over bald faced lies in their report that attempted to cover up the numerous failures of protocol on that fateful day. Our top officials failed to do their jobs on 9/11, yet no one was demoted in rank and no one was prosecuted for their egregious ineptitude. Bush, Cheney and Rumsfeld all failed to act appropriately, and in fact, acted suspiciously outside the norm of their designated duties.
As far as the anthrax attacks go, they were actually tracked to a US military facility, at Ft. Detrick, Maryland. That’s right, the anthrax used in the attacks was made in a US Army lab. Once that story became public, they shifted their blame from foreign terrorists to designated patsies within the US defense structure. The story died immediately.
So, with all of this in mind, we have only had TWO “alleged” successful terrorist attacks in this country in eleven years time, and both were highly suspicious events that have been attributed to false flag attacks from rogue officials with the US government, yet for some reason, we keep passing law after law that rescinds our Constitution and Bill of Rights, to set up a virtual police state in the US.Does this honestly make any sense to you?
For what it’s worth, we are actually fomenting terrorism with our highly bogus, bst War On Terror. We have formally invaded and brutally attacked three countries without provocation, Afghanistan, Iraq and Libya, plus we’re also bombing Pakistan and killing scores of innocent civilians there as well.
This reporter’s take is, TPTB are trying to escalate terrorism to justify their fascist takeover of the United States. They’re literally trying to piss off foreign entities to pick a fight. Again, they’re attempting to justify their assault on “We the People,” to establish a police state lockdown in America. This isn’t about fighting terrorism folks, it’s about keeping us under their heel, under a 24/7 watch.
Look at what’s happened in just the last few months… Congress passed the NDAA Act behind our backs, authorizing military use on US soil against American citizens. At the same time, President Obama has enacted the SIP, the Strategic Implementation Plan against domestic “extremism.”
If you speak out against the government for criminal activity, or for egregiously attacking our Constitution, you can legally be considered an extremist and a terrorist. Bad news for you, because now you can be hauled away and imprisoned for life, without a trial or your Habeas Corpus rights.
FEMA also has drawn up a new Contingency of Government plan that incorporates offensive military definitions and criteria that can be used against “We the People.” Add to this the fact that the FBI has enacted new absurd terrorism identifiers that make us all suspects. (Having more than seven days worth of food in your house makes you a terrorist suspect. Please see my three-part series on the NDAA legislation.)
What is most unusual about the vote for the new drones over America bill (HR 658) is it was very much a partisan vote, with Republicans being the primary supporters and Democrats staunchly voting against it. You can see the roll-call of votes below if you doubt this. The house vote was very close, with 223 yes votes and 196 no votes. Sadly there were 13 reps that decided not to vote on the bill.
The real curiosity is that the vote in the Senate was overwhelmingly in favor of the bill, with only 20 Senators voting no. Again, most of those voting no were Democrats. Still, how does the Senate vote highly in favor of such a horrific bill, when the House is nearly split down the middle? And once again, the partisanship absolutely baffles me.
I’m starting to think that maybe the research from the 2011 University College of London study is actually correct. They proffered that people tending to be conservatives have a much larger amygdala. Why does that matter?
According to the study, the larger the amygdala, the more susceptible the brain is to being scared. At face value that seems patently absurd to this reporter. Seriously, it sounds absolutely ridiculous, but in light of the recent vote on HR 658, I’m seriously beginning to wonder.
To be fair, there were some Democrats involved in the passage of this bill, such as the regular corporate shills, like Diane Feinstein, Barbara Boxer, and Carl Levin, but the support for HR 658 is far and away one-sided. That is disturbing to see. Again, it truly baffles this reporter, but I digress from the gist of this article.
If you think that having 30,000 drones over America is going to make us safer, you’ve been watching too much TV. How do these drones know who is traveling in a particular vehicle? How do they know if a sleeper cell has suddenly become active, or if a group has successfully infiltrated the country?
Would these drones have stopped the 1995 Oklahoma City bombing? Would they have stopped the 9/11 attacks? Would they have stopped the anthrax attacks? The answer to all three of these questions is a resolute NO, because US authorities were asleep at the wheel, or complicit in all three of those events.
So how will 30,000 drones over the US keep us safe from terrorism? Maybe a better question is, how might 30,000 drones be used to enforce a police state over American citizens. The latter is more chilling and offers far more possibilities for TPTB. This is quite disconcerting given the fact that during the latest census all of our homes were GPS’d.
The bill is worth $63.4 billion dollars, so it will be interesting to track the money on this one. Considering that we are in such a dire economic crisis, it is interesting that they deem it necessary to spend $63.4 BILLION dollars at this time.
Another disturbing thought, these drones can remain airborne for up to 50 hours at a time. What perils does this offer for air traffic safety, by adding 30-THOUSAND new aircraft to our skies? The FAA has nine months from the bill’s signing to submit a plan to safely allow access for the drones.

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The fact that our corporate controlled mainstream media failed to report on this, as they failed to do with the NDAA legislation, ought to tell you that they are working with TPTB. No other conclusion can be made. They have been complicit and willing participants in these anti-Constitutional attacks on “We the People.”
This reporter advocates naming them as accessories to the crimes of state, for they are sharp enough to ferret out the real story, yet they refuse to do so.
One side note on HR 658… it also allows for GPS control and landing of aircraft. This is actually supposed to be the major impetus for the bill, with the drones as a secondary component. The GPS aspect is somewhat troubling because of the magnetic shifts that have been occurring on this planet.
The geomagnetic poles have undeniably been moving, so much so that airports have had to re-designate runway coordinates and adjust their GPS instrumentation. I would hope that with this in mind, they have implemented proper safeguards to account for this documented scientific anomaly.
In conclusion, it is very clear that a police state has descended upon America. If you doubt that, you have not been paying attention. The agenda for the New World Order has been furthered tremendously in the last decade since 9/11, and even more so in just the last year. NWO advocate Senator Jay Rockefeller said the bill is “the best news that the airline industry ever had. It will take us into a new era.”
You have to seriously ask yourself… with only TWO incidents of actual successful terrorist acts since 2000, why is our government moving recklessly with such EXTREME measures to counter a threat that does not present itself to us as on a daily, weekly, monthly, or even yearly basis?
George W. Bush absurdly said after 9/11 that the terrorists hated us for our freedoms. It would appear to this reporter that it is the powers that be who truly hate our freedoms. Foreign terrorists did not take our freedoms away. Our politicians and government officials have done that, and they did it because Americans were too lazy to pay attention to what has been going on in their own country.
We are the most overly entertained society the world has ever known. There is a reason for that. If you keep watching the boob tube and continue to ignore what our elected servants are doing to us all, pretty soon you will be watching “Amerikan Idol” and “Goosestepping Mit Der Stars.”
What is happening in America today is far worse than Nazi Germany. Just because you still get to watch the idiot box and shop at Wal-Mart does not mean that you are free.
Time to wake up America. It’s time for all good men (and women) to come to the aid of their country, while you still have the chance to do so.

You have to really question what passes for financial analysis these days. One financial show was discussing the recent increase in consumer debt as something positive. In the same breath this person also said that households increased savings. Now think about this statement. If you financed a $2,000 vacation on your credit card but increased savings by $500 did your balance sheet improve? Of course not. Let us not even dive into the fact that most of the recent consumer debt increase has come at the hands of student debt which is already in a massive bubble. We are simply repeating the same mistakes with a different soundtrack. We are trying to get out of a debt led crisis with more debt. The facts even show this and we have compiled some of the more troubling data by putting the entire debt market into perspective here. Is it really possible to solve a problem based on too much debt with more debt?The total market of debt shows our addiction to borrowed money
We flat out have an addiction to borrowing. Total market debt is now up to an astonishing $53 trillion and continues to grow. Take a look at this frightening data:
In 2001 total credit market debt was up to $28 trillion. Today it is now well above $53 trillion and inching closer to slapping on another trillion dollars this year. If you look at Greece as a microcosm of the bigger issue, you realize they are treating a solvency issue as if it were a liquidity issue. Let us be absolutely clear that all of this debt will never be paid off. This warrants repeating:

“The $53 trillion in total credit market debt will never be fully repaid.”

In essence the total debt markets are growing even though the debt will never be paid off. Since most thinking people get this, the banking sector is leveraging central banks to basically print money since no person would lend money out knowing they would never be paid back. Do people really think we are going to pay off our $15 trillion national debt when our deficits look like this:
We’ve been running continuous budget deficits since the late 1970s. We had a brief respite when it came to having a surplus with the tech boom but that was blown out the window completely with the real estate mania. Contrary to what most will say, deficits do matter and massive deficits really matter.
Let us be abundantly clear that the total market debt is incredible. You now start having this challenging race where you are trying to avoid having your total debt surpass your annual GDP. The US has passed that mark and so have many other countries. The results in the long-run are never positive especially when people wise up and start asking for their money back. Since most don’t have the funds, they pay for it via inflation and a devaluation of their currencies. A few articles have circulated where Greece is trying to enforce stronger tax collections yet their system on collecting taxes is so corrupted that they have no way of achieving this without completely revamping the system.
If you think Europe is done just look at Portugal since they are next in the debt grinder queue:To the debt increase in the US
The access to easy debt creates massive amounts of bubbles. We saw this in housing and now we are seeing it here in the US with the giant higher education bubble:
Keep in mind this is only a tiny part of the student debt market. This year we will surpass $1 trillion point for student loan debt. I believe this will be another crisis that will hit and many indebted students are already feeling this. Many are being sucked into paper mill for-profits that are essentially scam factories that raid the government backed student loan funds. They lobby Congress to make it easier for them to report horrific placement data and change the metric on default reporting so it doesn’t look as atrocious. Even with these softballs from our bought out politicians, the data is still horrible.
A debt bubble cannot be solved with more debt. That should be obvious just like saying savings increased but people went into more debt should cause you to pause. Yet few in the financial media ever take a timeout and many missed the tech bubble bust, the housing bubble bust, and gear up because they will miss the other debt bubble bust as well.

The replacement of lost liquidity is NOT arithmetic. Booms, like busts, turn geometric on their liquidity effect because of the impact of mass financial psychology. Management of Perspective Economics primarily operated by mainstream media can make the gestation period of this event long, but it cannot reverse the underlying process.

With there being no question whatsoever that a credit event is on the near horizon for Greece, there is no avoidance of a further haircut in the valuation of Greek debt held by international banks, primarily Euroland institutions. What you take away with one hand you must provide with another if the banking system of Euroland is to remain viable. As you haircut (reduce in value for balance sheet considerations) Greek debt you reduce the value of that debt held as assets of financial institutions, therein reducing their viability to borrow in order to conduct their banking activities. This mark down is in full gear as speculation advertises to the world that the next step in this Greek tragedy is a haircut of value to just 30%.

How is it possible for the Euro wizards of words to punish Greek debt severely but not hammer others equally now under assault both by mainstream media as well as the undertakers of bond ratings in the USA?
The argument takes a position that the International Swaps and Derivative Association, which is made up of the manufacturers of these devices, will not self immolate by declaring credit events to be credit defaults. This is the ultimate irreversible can kick directly into the dead end sign at the end of the road of postponement to perdition.
Financial currency inflated hell by global debt monetization is the condition from which there is no escape, except though burning down the old system and making a new one. This is the dead end sign at the end of the road for can kicking. It is the condition of financial perdition. It is not something coming in a distant future. It is here and now, clear and present, if you have the eyes to see.
The means to this end is the combination of sick sovereign debt, risk insurance issued against the default of debt without sufficient liquid capital to do so, and the fact that those entities who issued this insurance are themselves and in truth illiquid under strain thanks to the capitulation of FASB on true market value of their legacy and other assets. This is the construction of the house of financial cards that will not survive intact during the period of 2012 to 2015. This is what gold at $1700 is indicating to those unfortunate enough to understand the practical workings of a system whose life force has been stolen to a degree that can only be deemed epic.
Never in written history has anything this size occurred where trillions has been bled away from an economic system with impunity. In all history when this has occurred the then monetary system imploded, to be replaced always by a commodity based money. That is what the Retenmark was in the Weimar experience. This is what the virtual reserve currency will be that replaces the US dollar in the next three years. The commodity currency definition will be derived by a connection to the gold held by the central banks of all the currencies that make up the Western world averaged virtual currency. This virtual currency will be a computer based settlement mechanism that cannot be traded in by other than central banks on behalf of trade settlement. Each contributing nation will also contribute to a universal M3 that will be the percentage measure of gold’s value to determined percentage-wise appreciation of depreciation, constituting value of the position held by each central bank in gold. Few if any central banks need to make transactions to adjust value as the squids of the world will invent derivatives upon which to speculate on the value of gold as a product of the growth or contraction of the western world M3.
This is not by any means a gold convertible system. This is not by any means a perfect system. There will be automaticity in this system but an agreement only by members to perform as above. However this system will work the same as the Retenmark worked. When the need becomes so great to believe in something solid anything that sounds solid has and will again work.
Only a resurgence of business based on solid foundations of equity and not debt can do the final clean up and provide a door to a better future.
No politician anywhere can do the necessary without causing the explosion of the results being heard almost as a new big bang. We are going to inflate this debt away or those in power will be swept away by the violence inherent in the suffering citizen.
Gold and only those things gold will provide the bridge to maintaining a lifestyle, maintain some freedom of choice and most importantly give you options you would not otherwise have. This has been as it always has been and will continue so. The drama of the market is nothing but that – sound and fury presaging but not defining change.
Do not allow anything to deter you from holding that which will build your bridge to tomorrow safely.
I am personally 100% in. It is my intention to hold as much gold as possible lending to me leverage without borrowing or margin. What was done in the 70s cannot be done now because we are only on the cusp of the volatility in the price of gold and it is already impossible to carry leverage except in the manner I have devised for myself participated in by others. I invite you to join with me.
This is a lonely road we are on where its direction does not tend to make friends. The road to freedom of any kind never does.
Stay focused. “Non Carborumdum Est,” do not let the hateful, vengeful bashers get you down.

"By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, 'Who would trust a Greek bank?'" - Russell Shorto, from his February 19, 2012 New York Times article titled The Way Greeks Live Now

Any financial system that is based on debt is doomed to fail. Today, we are living in the greatest debt bubble that the world has ever seen, and if all of a sudden people could not use credit to buy things our economy would immediately ground to a halt. Unfortunately, no debt bubble can last forever. When this current debt bubble finally bursts, faith in the financial system is going to disappear, credit is going to freeze up and there is going to be a massive wave of bank failures. Right now, Greece is a warning sign for the world. Nobody wants to lend money to Greece, the Greek banking system is dying, one out of every four businesses has already shut down, unemployment is soaring and the Greek economy has now been in recession for five years in a row. Sadly, the economic implosion in Greece is rapidly accelerating. The Greek economy shrunk at a 7 percent annual rate during the 4th quarter of 2011. That wasn't supposed to happen. Things were supposed to be getting better in Greece by now. But instead the Greek depression is getting even worse, and very soon the rest of the world is going to be going through what Greece is currently experiencing. Unfortunately, most in the mainstream media are treating what is happening in Greece as an "isolated incident" rather than as a very serious warning sign for the world. Thankfully, there are at least a few reporters out there that are realizing the gravity of the situation. The following is how one reporter from the New York Times recently described what life is like in Greece now....

By many indicators, Greece is devolving into something unprecedented in modern Western experience. A quarter of all Greek companies have gone out of business since 2009, and half of all small businesses in the country say they are unable to meet payroll. The suicide rate increased by 40 percent in the first half of 2011. A barter economy has sprung up, as people try to work around a broken financial system. Nearly half the population under 25 is unemployed. Last September, organizers of a government-sponsored seminar on emigrating to Australia, an event that drew 42 people a year earlier, were overwhelmed when 12,000 people signed up. Greek bankers told me that people had taken about one-third of their money out of their accounts; many, it seems, were keeping what savings they had under their beds or buried in their backyards. One banker, part of whose job these days is persuading people to keep their money in the bank, said to me, “Who would trust a Greek bank?”

Can you imagine? Greece is experiencing a full-blown economic collapse and nobody can see a light at the end of the tunnel at this point. As I have written about previously, the overall rate of unemployment in Greece has now risen above 20 percent and the youth unemployment rate in Greece has soared to an astounding 48 percent. Deleveraging can be an extremely painful process. Greece has been forced to try to reduce the size of its budget deficit, but every time it cuts government spending that causes economic activity (and thus government revenues) to slow down as well. Now the EU and the IMF are demanding that even more very painful austerity measures be implemented in Greece even though Greece is already experiencing a full-blown depression. The EU and the IMF are demanding that Greece fire 15,000 more government workers immediately and a total of 150,000 government workers by 2015. The EU and the IMF are demanding that wages for government workers be cut by another 20 percent. The EU and the IMF are demanding that the minimum wage be slashed by more than 20 percent. The EU and the IMF are also demanding significant reductions in unemployment benefits and pension benefits. Of course all of those cuts are going to make the short-term economic conditions in Greece even worse. The rioting, looting and burning of buildings that we are witnessing right now in Greece is likely to continue for quite some time as exasperated citizens attempt to express their frustrations to politicians that simply do not seem to care. According to the National Confederation of Greek Commerce, recent rioting resulted in damage to 153 businesses in Athens. 45 of those businesses were totally destroyed. You can view some stunning footage of the current rioting in Greece right here. Despite all of the austerity measures that have already been implemented, the truth is that Greece is very likely to default soon anyway. There is a very good chance that the new austerity agreement that the Greek parliament just approved will never be implemented. There are new elections scheduled for April and the current party in power is polling in the single digits. The new Greek government is likely to look much different from the current one, and nobody knows for sure if the new government will follow through on any of the promises being made by the current government. In addition, the German parliament must approve this new deal with Greece, and the German parliament is not scheduled to vote on it until February 27th. Considering the mood in Germany right now, approval is not guaranteed. So there are all kinds of things that could go wrong with the "deals" that are currently being discussed. The truth is that a Greek default in the coming months seems to become more likely by the day. Some in the financial world almost seem eager for a Greek default. The following is what Jon Moulton, the chairman of Better Capital, recently told CNBC....

"If I was Greek, I wouldn’t be going for these measures, I’d be going for default and getting it over with. Would you like two to three years of pain or 20?"

But a disorderly Greek default would not be a pleasant thing for the global economy at all. A recent article in the Guardian detailed what some of the consequences of a Greek default and exit from the eurozone might be....

But default and "re-drachmatisation" would be a costly and chaotic process. In the long term the euro might be strengthened if some of its weaker members headed for the door. But in the short term banks across the eurozone might have to be closed to prevent a run on the single currency as investors speculated about which country might be next. A new wave of bank nationalisations would be likely to follow as lenders counted their losses on now worthless Greek debt.Capital controls would have to be imposed and borders shut to stop money flooding out of Greece. Portugal, Italy and Spain would come under intense pressure from investors wary about the risk of another victim. Banks everywhere, already reluctant to lend, would cut back hard, nervous about their exposure to the bonds of all Europe's crisis-hit states.

And the financial crisis in Europe is going to continue to spread well beyond Greece. Moody's Investors Service just downgraded the credit ratings of six European nations. The following is how Bloomberg described the downgrades....

Spain was downgraded to A3 from A1 with a negative outlook, Italy was downgraded to A3 from A2 with a negative outlook and Portugal was downgraded to Ba3 from Ba2 with a negative outlook, Moody’s said. It also reduced the ratings of Slovakia, Slovenia and Malta.

Countries such as Italy, Spain, Portugal, Ireland and Hungary are heading down the exact same road that Greece has gone. Greece was the first one to experience a full-blown depression, but soon Greece will have a lot of company. Greece is most definitely a warning sign for the world. If you keep recklessly piling up debt, eventually a day of reckoning comes. It is inevitable. But Barack Obama does not seem to understand this. He continues to pile another 150 million dollars on to our national debt every single hour. He knows that cutting spending significantly right now would hurt the economy and that would significantly hurt his chances for another term. Needless to say, Barack Obama is not likely to do anything that is going to significantly hurt his chances for another four years in the White House. So we continue to roll on toward disaster. The U.S. financial system is like a car with no brakes that is heading straight toward a 5,000 foot drop at 100 miles an hour. It is all going to seem like fun and games to some people until we hit the canyon floor. Once that happens, nobody will be laughing.

New data just released revealed delinquency rates for mortgage holders is up in the last quarter of 2011. Now, the national mortgage delinquency rate is 6.01%, up from 5.88% in the third quarter of 2011 according to TransUnion. This downward trend in real estate prices will not be slowed by this bad news. Also, keep in mind, because of the $26 billion foreclosure fraud deal just agreed to (that lets the biggest banks off the hook for forgery and perjury), the banks are only going to be empowered to spike the pace of foreclosures in 2012. This is all negative for prices in a market where nearly half of all homes in America (11 million) are worth less than the mortgage. More mortgage delinquencies plus more foreclosures will equal more bank owned inventory, and when you have a lot of something, the price goes down. It is a law of economics not even the Federal Reserve can defeat.

We have not seen the end of the trend of negative equity in real estate. I would not be surprised to see more than 60% of residential real estate become underwater in the next year or so. When the Fed stops suppressing mortgage interest rates (as it has been doing for the last few years, currently at or below 4% for a 30-year loan), what will happen to prices? You have to ask yourself, how many more people will just throw in the towel and stop making mortgage payments for a losing investment? My bet is the banks won’t even have to go through the grueling foreclosure process where they have to commit forgery and perjury. The big banks will just be getting a lot more “jingle mail” in the form of house keys from defaulting borrowers.

It seems no matter how bad the news is, it is spun to be positive for the so-called “recovery.” The Washington Post reported today, “We were hoping for better, because delinquencies remain very high,” said Tim Martin, group vice president of U.S. Housing in TransUnion’s financial services business unit. Prior to the housing bust, the mortgage delinquency rate typically hovered around 2 percent.” Here comes the positive spin to awful news. The Post story goes on to say, “He added that while the increase was not good news, the year-over-year decline is encouraging, and points to a continued, if slow, recovery in the housing market.” You have to be kidding me!! Mr. Martin is certainly kidding himself that there is any kind of recovery in housing.
The mainstream media (MSM) just cannot let go of the “recovery” theme. Yes, some markets have had declines in mortgage delinquency rates, but they are in markets that have already taken bigger than average price declines in real estate because of the ongoing crisis. In those markets, the delinquency rates are still very high compared to the national average. This is a real estate collapse in slow motion that has been slowed down by ultra cheap rates and the Fed buying trillions of dollars in toxic mortgage debt. My only question is when will we see it all speed up to real time?

U.S. consumers may be able to ignore continued warnings about economic and political instability by avoiding the news and burying their heads in the sand when water cooler conversations pop up, but what they will not be able to ignore is paying $40 more every time they pump gas into their minivans. According to oil industry insider and former Shell CEO John Hoffmeister, that’s exactly what we can expect this year.
In an interview with CNBC, Hoffmeister warned that the price of oil will continue to rise amid increasing global demand from emerging economies, tensions in the middle east, and a weakening dollar, causing the price of gas to jump to $5 per gallon before the end of this year:

Via The Daily Crux and Economic Policy Journal:

Get ready to pay $5 a gallon for gasoline this year.
ohn Hofmeister, founder of Citizens for Affordable Energy and the former CEO of Shell Oil’s U.S. operations, warned that there is a “better than 50 percent chance” the price of gas will spike on continued heavy demand in emerging markets and weak public policy at home.
He also sees West Texas crude prices touching “the midteens to $120 a barrel some time this year.”
“What’s really unprecedented is developing countries, particularly China and India, have this insatiable need for more oil and that has not been taken into account when we think of public policy in this country,” he said.
“So while we may be producing a bit more oil in this country, and while demand is down a bit, on a global basis I’m afraid we face a continuing onslaught of prices creeping ever higher,” he said. “I hope I’m wrong on this. I’d love to be wrong on this.”
Source: MSNBC

Some of you may recall what happened the last time gas jumped to all-time highs averaging $4 across the country in the summer of 2008:
Consumers were outraged, and depending on who you asked about the blame for our energy woes, it was the fault of President Bush, democrats in Congress, the Saudis, or environmentalists.
Regardless of the causes, what became clear is that the American consumer could not economically handle gas prices at those levels (even though our European counterparts have been paying at least double that for years).
You may also recall what happened immediately following the $4 top in gasoline prices:
While most Americas have not yet realized the seriousness of our economic crisis, you can be assured that if John Hoffmeister is right there will be an almost immediate effect on discretionary consumption as the prices for everything will jump accordingly.
Suburban commuters who spend two hours a day driving to and from work will see their monthly gas expenditures nearly double, the price of food will rise as a result of increased transportation and delivery costs, and those who are already struggling to make ends meet will be forced to reduce or eliminate spending on essential goods and services.
It may not seem like much at first glance, but $5 gas could very well be the trigger that, like in 2008, turns financial markets and the economy on its head, and sends us into the next major down-wave in this crisis.

President Obama said in his State of the Union speech last month, “We’ve already agreed to more than $2 trillion in cuts and savings.”That was reassuring.
The new budget he released this week promises $4 trillion in “deficit reduction” -- about half in tax increases and half in spending cuts. But like most politicians, Obama misleads.

Cato Institute economist Dan Mitchell, a recent guest on my Fox Business show, cut through the fog to get at the truth of the $2 trillion “cut.”
“We have a budget of, what, almost $4 trillion? So if we’re doing $2 trillion of cuts,” Mitchell said, “we’re cutting government in half. That sounds wonderful.”
But what the president was talking about is not even a cut. The politicians just agreed that over the next 10 years, instead of increasing spending by $9.48 trillion, they’d increase it by “just” $7.3 trillion. Calling that a “cut” is nonsense.
Mitchell gave an analogy: “What if I came to you and said, ‘I’ve been on a diet for the last month, and I’ve gained 10 pounds. Isn't that great?’ You would say: ‘Wait, what are you talking about? That’s insane.’ And I said: ‘I was going to gain 15 pounds. I’ve only gained 10 pounds, therefore my diet is successful.’"
Democrats use this deceit when they want more social spending. Republicans use it for military spending.
And the press buys it. The Washington Post has been writing about “draconian cuts.”
“The politicians know this game,” Mitchell said. “The special interests know this game. Everyone gets a bigger budget every year. ... And we wind up, sooner or later, being Greece.”
We are definitely on the road to bankruptcy.
“We have maybe 10, 15 years' advanced notice. And what’s frustrating is that we’re not taking advantage of that, even as we see these other countries collapsing into social chaos and disarray.”
Mitchell points out that the politicians don’t even have to make actual cuts to save the future. If they just slowed the growth of government to about 2 percent per year, the U.S. economy could grow out of this mess. But the politicians won’t do even that.
“Being from the Cato Institute, I actually do want to cut spending. But if all we’re trying to do is balance the budget over 10 years, which is sort of the minimal thing that politicians keep saying we should do, if we simply limit the growth of spending to 2 percent a year, which is about the projected rate of inflation, we’ll have a balanced budget in 2022. ... But instead, the politicians say, 'Oh, we’ll have draconian and savage budget cuts.' ... They don’t want to put government on a diet, even if that diet allows spending to grow 2 percent a year.”
They also continually mislead us about what their schemes will cost.
President Bush said the war in Iraq would cost $50 billion to $60 billion. It cost $800 billion. When Medicare Part A was created, the government said it would cost $9 billion in 1990. It cost $67 billion. They said the hiring of TSA airport security screeners would cost $100 million. Then they spent $700 million. Yet the media report the estimates as if they are realistic. Again and again, politicians get away with underestimating the cost of their programs.
Often the cost goes up because people change their behavior to get free stuff. A program meant to help the needy costs a certain amount. The next year, it costs more, because now more of the needy know about the program and more social workers know how to tap it. The next year, the non-needy feel like suckers if they don’t get the handout, and they figure out a way to game the system.
Then, Mitchell point out, “what do politicians do the next year? They expand the program to buy more votes. And the year after that, they add a new benefit. That’s what’s happened with Medicare. It’s not just that they got the fundamental estimates wrong. They did. But every new generation of politicians figures out some new expansion, some new benefit.”
And so we’re on the road to Greece.
Bottom line: Don’t trust the politicians’ numbers.

"Had the Japanese [army's territorial conquest in Asia] got as far as India, Gandhi's theories of "passive resistance" would have floated down the Ganges River with his bayoneted, beheaded carcass." - Mike Vanderboegh.

A week ago we presented an excerpt from Credit Suisse's most excellent piece "The Flaw" - merely the latest in one of the best overviews of the neverending Greek soap opera by William Porter. Yet every soap opera eventually ends. Although when it comes to Nielsen ratings, the denouement is usually a whimper. In the case of Greece, it will be anything but. Yet listening to the daily cacafony of din from Europe's leaders, who are likely more clueless than the average reader as to what is really going on, one may be left with the impression that there is a simple solution to the problem, and Greece may be "saved... in hours." It can't. In fact, as of today, Porter's s conclusion is: "we are left with a sense that the probability of delivering the largest default loss in history in a disorderly way on or before 20 March has increased relative to doing so in an orderly way."
As a reminder, Credit Suisse was the one smart enough bank which chose to completely ignore day to day newsflow out of Greece as it is literally noise with absolutely no signal. Wish we could say the same for FX traders. As such, CS' "view remains that, in any case, the chance of a disorderly outcome after 20 March is high, so to that extent the immediate events are not really central to our view, but of course are fascinating." Quite fascinating indeed, because they show to what extent an unravelling financial system will go to pretend that the number one unfixable problem in Europe - the lack of money good assets, available to either be sold, repoed, pledged, equitized, or otherwise monetized. As we have observed previously, at this point it doesn't matter for Greece- even if the country gets the second bailout, which will be used almost exclusively to recycle cash into the banking system, Europe will have a first lien on nearly 150% of its GDP. At that point the country is both a de facto and de jure colony of the Troika. The longer the bang, or whimper, is delayed, the fewer assets will remain in Greek possession, and the poorer the population will be for the inevitable fresh start, with or without the Euro.
So meandering regurgitations aside, because all this has been said one hundred times already, here is Credit Suisse's latest attempt at a fresh take on events.

We are cautious about reports of the exchange “running out of time”: the 20 March binding constraint is a GGB maturity. Greece is sovereign and has run out of money; it can choose the timetable. The case might be different if the maturity were an English law bond (but perhaps not much.)

The real issue remains the ECB’s exposure to the BoG, in our view. Protecting that (i.e., ensuring that Greece does not systematically default via introducing a new currency) becomes the bottom line, as the latest Flash explored.

Since our objection to ‘leaving EMU’ is that its corollary is systematic default, bank nationalization and the like, once the latter problems are a given, a situation towards which we seem to be heading rapidly in Greece, then the cost of the incremental step of introducing a new currency become less. Our view remains that the economy would subsequently euro-ize but potentially at a different cost level. The effect of the delay would have been to transfer the cost from Greek citizens (who have now moved substantial sums out of the country, providing in fact a source of subsequent BoP financing that makes the equation even more attractive) to the ECB. The core has a very serious problem and again should swerve, but the probability of a ‘crash’ is rising.

We remain very cautious about the long-term sustainability of the debt after restructuring, and it is just possible (not our core case) that the troika takes the rational decision that it is cheaper to let Greece default and reimburse the ECB for its approx. €30bn of GGB losses than to pay the rising but nominally €130bn. Yet it was only on 14 February (two days before writing) that the ECB was confidently talking of distributing its GGB profits, so we are cautious about second-guessing the analytical framework being used.

Overall, we are left with a sense that the probability of delivering the largest default loss in history in a disorderly way on or before 20 March has increased relative to doing so in an orderly way. (Our view remains that, in any case, the chance of a disorderly outcome after 20 March is high, so to that extent the immediate events are not really central to our view, but of course are fascinating).

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.

I believe in the Bill of Rights. I believe that the rights of American citizens supersede those of non-citizens within the borders of this great nation, yet the government desires to institute an international or global standard of jurisprudence upon the people.I believe in using cash to prevent the risk of credit fraud or excessive waste and accumulation of debt for everyday or weekly purchases, while avoiding enslavement to the banks as a debtor.I believe in acquiring goods and services in large quantities or small without having to answer to others.I believe the Second Amendment to the United States Constitution only asks that I demonstrate that I am sane, legally able to, and of age to acquire firearms and ammunition but not explain why I wish to purchase a firearm to a neighbor, stranger, or bureaucrat.I believe the United States must divorce itself from foreign entanglements and begin the process of repatriating our troops home, while honoring those who have served, and assisting the families of the fallen.I believe America should come first. All other nations should remain at the rear of the line.I believe that all religions should have the right to be practiced within our borders until they begin to infringe upon the rights of others.I believe the two political parties are so corrupt that they are assisting in the destruction of our society at a cultural, economic, and international level.I believe that I should be allowed to purchase PVC pipe to repair my sprinkler system, nails for my nail gun, shovels for my yard, and fertilizer for my grass without being subjected to a Department of Homeland Security inquisition.I believe that I should be free to buy waterproof matches for camping, MRE’s for hiking, and those nifty .50 caliber ammunition boxes for storage without being put on a FBI watch list.I believe that I should not have to live my life in fear of my neighbors, children, or strangers contacting authorities and submitting false reports about my daily activities.I believe that I should be allowed to speak freely to my wife about the corruption and absolutism within our government while out in public without a clerk, stool pigeon, or dupe calling a toll free number and destroying my family’s life with accusations of crimes of which I am not guilty.I am a Patrioterrorist. If you believe in the Bill of Rights, the Torah, the Christian Bible, Hindu writings, peaceful Islamic script, anything that the Democrats or Republicans object to, or the ideals of our Founding Fathers, then you are a terrorist too.

The entire TSA paradigm is flawed. It requires an impossibility for it to succeed. For the TSA model to work, every single possible means of causing danger to an aircraft or its passengers must be eliminated. This is an impossibility. While passengers are being frisked and digitally strip-searched a few dozen yards away [inside the ostensibly 'secure' area], cooks and dish washers at the local concourse “Chili’s” [restaurant] are using and cleaning butcher knives." - Former FBI Agent Steve Moore

Monday, February 20, 2012

Tensions between Iran and the West continued to weigh on energy markets as oil rose to the highest level in five weeks on Thursday.
Benchmark West Texas Intermediate crude rose 45 cents to $102.24 in New York, while Brent crude, which is used to price foreign oil imported by U.S. refineries, rose $1.08 to $120.01 in London.
The price of WTI has risen about more than 3 percent since the start of the year. The increase in Brent has been even steeper, up nearly 12 percent.
Iran has been the center of attention in the Middle East — and the oil market — since November. It has threatened to cut off oil supplies to Europe to retaliate for an embargo that the EU plans to implement this summer.
The U.S. and Europe are using sanctions to pressure Iran to abandon its nuclear program, which they fear will be used to develop a bomb. Iran denies the claim. The European Union buys about 18 percent of Iran's total crude exports.
Iran relies on oil exports for about half of its revenue. Iran state media reported Wednesday that Iran would halt exports to six European countries. Iran's Foreign Ministry later denies that.
Analysts think Iran would hurt itself by stopping crude shipments.
"Given Iran's dependence on its oil revenues and the latest reports of its payment difficulties, an immediate ban on shipments is not overly credible," said a report from analysts at Commerzbank in Frankfurt. "At current prices, a ban on oil shipments would thus cost Iran around $70 million in daily oil revenues if no other buyers could be found."
The weather in Europe is keeping oil prices high as well, especially for Brent. A severe cold snap is pushing up demand for energy. The rise in Brent in turn contributes to high gasoline prices in the U.S., since many refineries use Brent to make gasoline.
Also Thursday there were more signs that the U.S. economy is recovering. The Labor Department said weekly applications for jobless benefits fell for the fourth time in five weeks to the lowest point since March 2008. While lower unemployment may be good news, it's also likely to increase demand for oil and push up prices.
Oil prices spiked at this time last year with uprisings in several Middle East nations, particularly Libya. Investors who worried about major disruptions in supplies bought oil and drove up the price. WTI is up 21 percent from a year ago, when it sold for around $85 a barrel. Brent is up about 15 percent.
In other energy trading Thursday, heating oil rose almost a penny to $3.20 per gallon and gasoline futures rose 4 cents to $3.04 per gallon.
Natural gas rose 15 cents, or 6 percent, to $2.57 per 1,000 cubic feet after the Energy Department reported the nation's gas supplies fell more than analysts expected last week.
At the pump, the national average for gasoline was unchanged at $3.52 a gallon.

The World Gold Council recently released its own report for the gold market for 2011. It noted that while global demand for gold had hit a new all-time high in (nominal) dollar terms, it was merely reaching its highest level in 15 years in terms of tonnages. Hardly the signs of an “over-heated” market, as is regularly claimed by the flock of mainstream Chicken Littles clucking about a “bubble” in the gold market.

Indeed, investment demand rose by a mere 5% year-over-year. Arguably, even that number overstates the performance of the gold market in 2011, since (in the real world) much of what is mistakenly classified as “jewelry demand” should be classified as investment demand.

The reason for this is that in much of the developing world gold jewelry is considered a form of “savings” (or investment) rather than mere adornment. In 2011, jewelry demand actually declined, meaning that on a net basis true investment demand was likely essentially flat on the year.
Of interest, however, there was one group of gold-buyers whose appetite was nothing short of voracious in 2011: the world’s central banks. The entities who create the paper confetti in our wallets which they call “money” were busily dumping that paper to buy gold in 2011 – roughly 500% more than what they purchased in 2010 (from 77 tons to 440 tons). Even 2010 had been considered a very notable year in this respect, as it marked the first year in which the central banks had become net-buyers of gold in decades.
It was only a few years prior to that when many of these same, central bankers were publicly proclaiming that gold was nothing but a “barbarous relic”. Western central banks flooded the market with thousands of tons of gold during those years (but don’t call it “manipulation”). And now they are buying the gold back. What are we to make of this “sellers’ remorse”?
Perhaps an analogy is in order. Suppose you noticed that all of the workers at the local Ford auto plant were all selling their Fords and buying Toyotas. What kind of car would you be most likely to buy under those circumstances?
The world’s central banks are dumping their own paper – in ever-increasing quantities – to buy a “barbarous relic”. On a net basis, they are now buying back the gold they sold, except at (nominal) prices 500% to 600% higher than the prices at which they dumped those 1000’s of tons of gold.
If we read an anecdotal account of a group of ordinary individuals who (over a period of decades) sold large quantities of gold at prices of $300/oz or less, and then suddenly reversed that behavior and began buying back their gold at prices of $1500/oz and higher, what would we conclude? Would we assume that these people were among the worst traders in the history of markets? Would we simply assume they were crazy?
So what are we now to conclude about the central bankers, or more specifically the Western central banks who were the perpetrators of most of that massive gold-dumping – since they have assured us that all of the gold they flooded onto the market was not intended to suppress the price of gold? Are we to conclude that they are among the worst traders in the history of markets (while simultaneously proclaiming their superiority in asserting the right to guide our economies)? Should we assume that they are all simply crazy? Or, perhaps, they are all “crazy like a fox”?
As with our hypothetical example of the workers at the auto plant; the normal, rational assumption we would make is that if the creators of a particular product shun the product that they produce in favor of a competing product that we can likely make one or more inferences:
1) The product they produce is inherently defective.
2) The product they produce is significantly overvalued.
3) The product which they swap their own good to obtain is inherently superior.
4) The product which they swap their own good to obtain is significantly undervalued (relative to their own product).
Do we have any reason to believe that the bankers’ paper currency is inherently defective? Yes. When these same bankers persuaded our governments to abandon the gold standard in 1971, our paper currencies ceased to be “money”. They were no longer backed by any tangible asset, so they instantly ceased to be units of value.
From that moment on they have been nothing but units of debt. Every dollar/euro/yen created (by the trillions) in recent years has been produced as a unit of obligation to these same, central bankers (didn’t that work our conveniently?). And now all of these debt-based currencies are being produced by governments in the process of defaulting on those debts. Even if one was to (charitably) assume that our paper currencies once had some pseudo-value, these paper “IOU’s” of defaulting-debtors will soon be worthless, if they are not worthless already.
Do we have any reason to believe that these paper currencies are significantly overvalued? Yes. As I explained in a previous commentary, any good which is produced at zero cost, and in near-infinite quantities (like U.S. dollars) must be worthless – as a matter of definition. With the other paper currencies being produced at slightly greater than zero cost (except for yen), they can currently at least pretend to possess some, slight value.
Do we have any reason to believe that gold is inherently superior to these (near-worthless) paper currencies? Yes. Contrary to the mythology of Western central bankers, far from being a “barbarous relic”, gold is an eternal storehouse of value – or at least it has been for thousands of years, up to and including today. Conversely in less than 100 years the mighty U.S. dollar, King of the Paper Currencies, has lost 98% of its value, with more than 75% of that plunge toward worthlessness occurring in the 40 years since the last remnants of a gold standard were abolished.
There is also a very long list of supply/demand arguments which clearly favor gold over (near-worthless) banker paper, but that would simply be overkill.
Do we have any reason to believe that gold is significantly undervalued versus the bankers’ paper currencies? Yes. Even if we embrace naivety and conclude that the thousands of tons of gold dumped onto the market by Western central banks was not intended to suppress the price of gold, as any first-year economics student could tell you it would inevitably have that effect.
With the gold-dumping having not only ceased, but reversed, again the basic dictates of supply and demand tell us that the price of gold has only begun its advance. This is especially true once we factor in how much further the bankers have diluted their paper currencies during this bull-market for gold. Indeed, once we also calculate the exponential increase in debts and the equally exponential rate of currency-dilution, in absolute terms gold is clearly more undervalued today than when the bull-market began more than a decade earlier.
When we combine the WGC data with the basic fundamentals of the gold market, a clear picture emerges. While Asian markets are strong, gold remains almost a complete mystery to Western investors. Proof of this comes in any historical comparison. Traditionally precious metals assets have constituted between 5% and 10% of financial holdings – and more than that in times of crisis.
Yet today, with Western economies currently sinking into a combination of economic depression and debt-default, we see Western investors with (on average) only 1% of their portfolios comprising bullion and other precious metals assets (i.e. mining shares). To suggest that gold-ownership (and silver-buying) in the West is likely to increase by a factor of ten (or more) in the near future would seem to be a conservative estimate.
Meanwhile, central banks are dumping their own paper for gold at a pace which is unprecedented since Nixon assassinated the gold standard in 1971. It is harder to imagine a clearer warning.
For the sake of all regular readers who (proudly) call themselves “silver bulls”, I’ll take a moment to observe that not only do we have many reasons to believe that silver is even more undervalued today than gold, but as “the peoples’ money” it is also much more affordable. Protect yourselves from the collapse of the paper currencies which even the creators of this paper are trying to dump themselves. Swap your banker-paper for gold and/or silver today – before this confetti (officially) acquires its actual value.

You might not want to read this article if you have a weak stomach. Most Americans have absolutely no idea what is going on in the dark corners of America, and when people find out the truth it can come as quite a shock. Many of you will not believe some of the things Americans are doing just to survive. Some families are living in sewers and drain tunnels, some families are living in tents, some families are living in their cars, some families will make ketchup soup for dinner tonight and some families are even eating rats. Some homeless shelters in America are so overloaded that they are actually sending people out to live in the woods. As you read this, there are close to 50 million Americans that are living below the poverty line, and that number rises a little bit more every single day. America was once known as the greatest nation on earth, but now there is decay and economic despair almost everywhere you look. Yes, money certainly cannot buy happiness, but the lack of it sure can bring a lot of pain. As the economy continues to decline, the suffering that we see all around us is going to get a lot worse, and that is a very frightening thing to think about.

The following is a half hour documentary produced by the BBC entitled "Poor America". Trust me, this is a must watch. Your heart will break as you hear some American children talk about what they have to do for food....

Wasn't that video absolutely mind blowing?
Those of us that still live comfortably are often completely unaware of what life is like out on the streets of America at this point.
There are millions upon millions of Americans that have lost all hope and that are living on the very edge of life and death.
And more join the ranks of the hopeless with each passing day. This upcoming weekend approximately 80,000 people in the state of Michigan will lose their unemployment benefits.
So what are those people going to do after that?
They have already been unable to find work month after month. Their savings are most certainly gone. Now the only money they had coming in is going to be eliminated.
Yes, I have written many times about how the U.S. government is absolutely drowning in debt and cannot afford to be giving out so much money. My point here is to show the other side of the equation. There are millions upon millions of Americans that are barely hanging on and there are no jobs for them. The suffering that those families are going through is very real.
Millions of other families are trying to get by on the incomes they pull in from part-time jobs. According to Gallup, the percentage of Americans that are working part-time jobs but that would like full-time jobs is now higher than it has been at any other time in the last two years. The number of the "working poor" just continues to increase, but most Americans don't have much sympathy for them because they "have jobs".
Well, when you are making 8 bucks an hour it can be incredibly tough to make it from month to month.
Just look at how much it costs to buy the basic things that we need.
Without gasoline, most of us would not even be able to get to our jobs. The price of gasoline has increased 83 percent since Barack Obama first took office, and it is poised to soar even higher. Right now, the average price of a gallon of gasoline in the United States is $3.51. Never before has the average price of gas gone above $3.50 so early in the year. Many believe that we could set a new all-time record this summer.
But last year was bad enough. In 2011, the average American family spent over $4,000 on gasoline.
So when you are making just a few hundred dollars per week, it can be a massive struggle just to put gas in your car and food on the table.
The article that I wrote the other day about the decline of Detroit really struck a nerve. All over America, people can see similar things happening to their own neighborhoods. People are scared and they want some answers.
Well, the truth is that we should have never allowed tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth to be shipped out of the country.
Just check out this stunning photo which compares the decline of Detroit to the rise of Shanghai, China.
Do you think that it is just a coincidence that Detroit is falling apart and that cities in China look sparkly and new?
No, the truth is that it is a natural consequence of our foolish economic policies.
There are hundreds of communities all over the country where third world conditions are setting in. For example, the following is how one blogger describes what life is like in a decaying suburb of Phoenix called Maryvale....

Crime and gangs are widespread. Most houses have either fallen into disrepair, or been remade with outside walls sporting spikes and ironwork. Many of the front lawns are now just dirt (or worse, gravel), the pools green and lethal.

Now we stand on the precipice of another major global financial crisis. Economic conditions in America are going to become significantly worse. The politicians in Washington D.C. may make sure that the boys and girls on Wall Street are always taken care of, but there will be no bailouts for the large numbers of Americans that are about to lose their jobs and their homes.

If you want an idea of what is coming, just look at what is happening in Greece. 25 percent of the businesses have shut down, one-third of all money has been pulled out of Greek bank accounts and unemployment and poverty are absolutely rampant.

For years, a lot of prominent voices out there were screaming and yelling about the dangers posed by our soaring trade deficits and our soaring budget deficits.

But the American people did not listen. They just kept sending the same politicians back to Washington D.C. over and over.

As a result, soon millions of those same Americans will find themselves doing things that they never dreamed that they would do just to survive.

"It's not about contraception," thundered GOP presidential contender Rick Santorum. "It's about economic liberty. It's about freedom of speech. It's about freedom of religion. It's about government control of your lives. And it's got to stop!"

He was talking, of course, about the Obama administration's recent decisions first to force large religious employers to pay for birth control and "preventive services" (including sterilization and abortifacient drugs), and its subsequent decision to demand that the relevant insurance companies provide it for "free" instead.

"That's not accommodation; that's laundering." -- Jonah Goldberg

The "accommodation" — the White House rightly refuses to call it a compromise — is a farce. If you're paying for health insurance — or if you self-insure, as many institutions do — shifting responsibilities to the insurance companies doesn't shift the costs, just the paperwork. A Catholic hospital would still pay for the services; there just wouldn't be a line item for it in the monthly insurance bill.

That's not accommodation; that's laundering.

Health and Human Services Secretary Kathleen Sebelius claims that the move will save money — an ounce of prevention saves a pound of "cure" — so religious institutions will incur no additional costs. If that's true, why haven't those greedy insurance companies been doing it all along?

If anything, President Obama has made the situation worse. The White House fact sheet seems to offer no exemption at all for religious institutions: "Under the new policy … women will have free preventive care that includes contraceptive services no matter where she [sic] works." That sounds like a complete win for the "Get Your Rosaries Off My Ovaries" crowd to me.

Of course, if religious institutions don't want to violate their consciences, they can simply stop offering health insurance altogether (providing yet another example of how Obama misled voters when he promised that the Affordable Care Act wouldn't cause anyone to lose their current coverage). That would at least allow religious organizations to uphold their principles. The result, however, would be to force taxpayers to subsidize practices many find morally abhorrent."That sounds like a complete win for the 'Get Your Rosaries Off My Ovaries' crowd to me." -- Jonah Goldberg

I think Santorum's argument is entirely right: This is about freedom, full stop. When we empower bureaucrats and politicians to make such huge personal decisions for us, it becomes impossible to avoid trampling on liberty. The Roman Catholic Church was simply the first in the leviathan's path.

If you look at the genetic and neuroscience revolutions waiting just off stage, the future holds enormous promise for personalized healthcare, including individualized genetic therapies. And yet the government is marching faster and faster toward wholesale approaches that prioritize the health of the system over the health of patients. It is impossible to imagine the myriad arbitrary abuses and petty tyrannies that could result.

It's amazing that liberals and libertarians can see eye to eye on ending federal bullying on the sale of raw milk, but liberals see no threats from a federal takeover of healthcare and the transformation of insurers into de facto branches of the government.

The freedom argument is old hat now. "Obamacare" supporters shrug off horror stories from Canada and Britain about concerns like waiting periods and denied services — and hypothetical scenarios of "death panels."

Well, here's something to ponder: If Rick Santorum's warning doesn't scare you, maybe Rick Santorum should? Personally, I think his detractors are determined to turn him into right-wing caricature (a cause he has aided more than once). He's prodded about gay marriage, contraception, radical feminists and his religious faith in the hopes that he will say something embarrassingly juicy for the MSNBC crowd.

But let's imagine the caricature is fair and he really is the boogeyman Rachel Maddow & Co. say he is. Worse, all his talk about "freedom" is just code for the right-wing version of progressive social engineering, i.e. he wants to turn women into breeders a la "The Handmaid's Tale."

Is that whom you want in charge of your healthcare?

It's really this simple: A government empowered to steamroll the people with the rosaries has the same power to trample the citizens with the ovaries. If you're afraid of Rick Santorum, you should be afraid of Obamacare.

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The Four Horsemen Have Saddled Up

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We're Liberty and Freedom-minded, professional fellows; with a plethora of things to say and no fear in expressing them. One of our favorite sayings is:
"Oderint dum metuant" which translates, roughly, as "Let them hate as long as they fear." It was a favorite saying of the Roman emperor Caligula. He wasn't a particularly nice guy, but he had the world at his bidding and history will never forget him or his notoriety. That's power.